What is a Certified Public Accountant or CPA

In some states, people can work as an accountant even if they have no formal education or experience whatsoever. In order to impose standards of quality and respectability upon the accounting industry, the idea of a CPA was born.A CPA is someone who has earned a board-certified accounting license that guarantees that he or she has at least the entry-level skills required to be a good accountant. If an accountant acts in an incompetent or unethical way, his or her CPA license can be revoked. Furthermore, a CPA is required to receive continuing education in the accounting field, to ensure that he or she stays up to date with the latest updates and changes in information. Each CPA license is granted for only one of the 55 U.S. jurisdictions, which include each state, plus the District of Columbia, the U.S. Virgin Islands, Guam, Puerto Rico, and the Commonwealth of Northern Mariana Islands. If a Certified Public Accountant wants to work in other jurisdictions, he or she must obtain a license for each one separately. What are the Steps to Becoming a CPA? In order to be licensed as a Certified Public Accountant, an applicant must pass requirements known as "The Three E's" - education, examination, and experience. The specifics of these requirements vary from jurisdiction to jurisdiction. To fulfill the education standard, most areas require a bachelor's or master's degree in accounting, or in another field if it includes a minimum number of accounting classes. Next, the prospective Certified Public Accountants must have a specified number of years of experience working under the supervision of a licensed CPA. Two years of supervised work experience is common in most areas. In some jurisdictions, this time is reduced to one year if the potential CPAs have an advanced degree or takes extra accounting classes. The final step is to pass a grueling CPA exam consisting of four parts: Regulation, Auditing, Business Environment and Business Concepts, and Financial Accounting. Each part of the test may be taken separately, but they must all be completed within a certain length of time, usually 18 months. If all four tests are not completed within 18 months of passing the first, that first test is no longer counted. The CPA exam is uniform throughout all 55 jurisdictions. Some jurisdictions acknowledge accountants who have all qualifications except the CPA exam with the title PA - Public Accountant. What does a CPA Do? The three major areas of work for CPA firms have traditionally included accounting and auditing services, preparing and filing taxes for businesses and individuals, and advising companies on management and compliance policies. People with businesses, investments, or other complicated taxes should think about using a CPA. Recently, new areas of business have opened up for accounting professionals, including forensic accounting, where accountants search through records for traces of criminal activity, personal financial planner services to help clients determine budgets and investment strategies, and information technology specialties like filing taxes online with the IRS's new efile options.